What is Bitcoin?

Bitcoin is a popular and distributed peer to peer digital currency, created and stored electronically. You can think of it as electronic cash that you can use to send money to friends or merchants hassle-free. It’s not centrally controlled, nor are they printed; instead, Bitcoin are made by people and businesses through software that solves mathematical problems.

Bitcoin belong to a growing category of digital money called cryptocurrency.

One of Bitcoin’s most distinguishing characteristics is that it’s completely decentralized. This means that its network is not controlled by any one institution. This makes a lot of people feel secure because it means that a large bank or institution won’t be able to control their money.

Bitcoin was invented by cryptographer Satoshi Nakamoto, who published the first white paper on the digital currency in 2008. He then went on to release the first version of the Bitcoin software a year later. Bitcoin has come a long way since then, and is now used widely across the globe for a number of transactions.

Why use Bitcoin?

There are plenty of advantages to using Bitcoin, many of which include:

Quick, Easy and Convenient

You can send and receive Bitcoin to anyone, anywhere in the world at any time in a matter of a few minutes. It’s also mobile-friendly, so you can transfer funds on the move.

Low Fees

There’s normally no fee when receiving or sending bitcoins, and many wallets will also allow you to pay a fee you’re willing to spend. When there is a fee, you’ll get faster confirmation of your transactions. This amount is very small, most likely pennies in value.

Secure

Bitcoin is 100% secure thanks to its protocol and cryptography. When using Bitcoin, users remain in control of their transactions. You’re also protected from identity theft since Bitcoin payments can be made without personal information associated with the transaction.

Transparent

All Bitcoin transactions are fully available on the blockchain for anybody to verify and use in real-time.

How do I buy Bitcoin?

There are plenty of different ways and methods to get Bitcoin. Here are some of the options that you can consider:

Online Exchanges and Wallets

New to Bitcoin? There’s a variety of exchanges and wallets that you can find, depending on your needs. Many exchanges and wallets will store amounts of digital and/or fiat currency for you – a lot like a regular bank account.

If you’re using an exchange, follow these simple steps:

First, create an account and fill in the required information.

Get verified by providing the requisite identification, such as a government issued ID.

Get your bank account verified by registering your information and confirming the micro deposit sent to you.

Select the currency you want to exchange into Bitcoin and transfer the funds via your bank account or a credit card.

Face to Face

You also have the option of getting or trading Bitcoin in person. If you want anonymity or don’t want to deal with banks, simply acquire Bitcoin via a face-to-face transaction with a local seller.

Selling Goods in Exchange for Bitcoin

Similar to barter trade, you can actually exchange goods that you own for Bitcoin. It’s another quick and convenient way of getting more of the digital currency.

Bitcoin ATM

You can withdraw or deposit Bitcoin using Bitcoin ATM machines near you.

Mining

You can also be awarded Bitcoin as a miner—once you’ve verified transactions and they’ve been added to the public ledger, also known as the blockchain, you’ll be given Bitcoin for your service.

As for paying for your Bitcoin, you can use anything from hard cash, credit and debit cards to wire transfers, or even other cryptocurrencies.

How do I sell Bitcoin?

There are three main ways to sell Bitcoin:

Direct Trade

The first method involves a direct trade with another person, or using an intermediary to enable the transaction, such as LocalBitcoins.com.

Exchanges

Use an online exchange to trade into the preferred currency, instead of another individual, to sell Bitcoin.

Peer-to-Peer Trading

This method allows Bitcoin owners to sell their Bitcoin for goods by selling them to individuals who wish to acquire cryptocurrency.

How does Bitcoin work?

Bitcoin transactions occur between electronic Bitcoin wallets, and are digitally verified and signed for security. Thanks to the massive public ledger called the blockchain, users are aware of all transactions, and its history and when Bitcoin were generated can be tracked.

If you send some bitcoins to, say, a friend, that transaction will have three pieces of information:

The amount of Bitcoin you wish to send.

The recipient’s wallet address, generated randomly and consisting of a sequence of letters and numbers – this is where you’ll be sending your funds.

A private key, which is also a unique sequence of numbers and letters exclusively available to you. This key will allow you to access your wallet.

Once a transaction is set up, it makes its way into the Bitcoin network where it awaits verification. Through the process of mining, miners use software to solve mathematical problems. Once completed, the transaction successfully moves into a public digital ledger called Blockchain.

Is Bitcoin secure?

Bitcoin has a strong track record for security and privacy, thanks to its protocol and cryptography. With private keys, individuals’ wallets are kept secure. The only way this would not be true is if users lose this information.

This is why, you should always take care with securing your funds, and we’ve assembled some tips and tricks to help you along the way.

What is Blockchain?

The blockchain, is a huge, shared public ledger where the entire Bitcoin network is situated. All verified transactions are added to the Blockchain, where everyone can see information pertaining to Bitcoin wallets and verify their balances.

What is mining?

Bitcoin mining primarily involves adding previous Bitcoin transaction records to the blockchain. The people involved are called miners; their job is to confirm the transactions to the network by solving mathematical problems using a software, as well as work towards using the blockchain to distinguish legitimate transactions and ensure that double spending does not occur. Double spending is when the same Bitcoin have been used twice.

The main goal of mining is to ensure security within the Bitcoin network. As a secondary goal, mining is also used to introduce Bitcoin into the system. As an incentive, miners get paid in Bitcoin for their services.

Where can I spend and use Bitcoin?

You’ve got your Bitcoin, and now you want to start spending. There’s plenty you can do with your Bitcoin. Use the digital currency for online purchases or even in stores (in person) across different industries, some of which include:

Travel

Accommodation

Restaurants

Retailers

Here are just a few examples of companies that accept Bitcoin:

Dell

Expedia

Purse

AliExpress

Wikipedia

Microsoft

CheapAir

Is Bitcoin anonymous?

Bitcoin transactions are not tied to any personal information which allows users to protect their privacy. However, since all Bitcoin transactions are public knowledge and permanently on the blockchain, other users can see the activity associated to a particular wallet address—hence not being 100% anonymous. It is highly recommended to only use Bitcoin addresses once to avoid your identity being revealed either through a specific purchase or other means.

Are there any transaction fees or costs?

Normally, Bitcoin transactions have no fees. Occasionally, there will be a Bitcoin fee required to speed up the transactions. It’s usually very minor – normally less than 40 US cents.

What is a Bitcoin wallet?

Your digital wallet is where you store your Bitcoin. To select a Bitcoin wallet that’s right for you, visit Bitcoin.org.

Here are some recommendations of wallets, based on your operating system:

If you’re an iOS user, check out Breadwallet,which is user-friendly and offers simple and quick steps to getting started in seconds.

For Android users, we recommend Mycellium,which is reliable and has been tried-and-tested by hundreds of thousands of users worldwide.

For Desktop users, both PC and Mac, we suggest Electrum,which is safe, fast and considered one of the most popular Bitcoin wallets around.

Don’t forget, there are multiple variations of the Bitcoin wallet that you can use. Choose from web, mobile, desktop or hardware when selecting storage that’s right for you. Here are a few differences among the types:

Web: High convenience, but riskier as your Bitcoin is being stored using a third-party.

Mobile: Easiest to use when you’re on the go.

Desktop: Only you can access through your computer, but be careful with malware!

Hardware: Offline and the most secure.

Why use hardware wallets?

If your phone is your bitcoin wallet, then you can view a hardware wallet as your vault. Although phone wallets are considered safe for day to day tasks, in the spirit of best practices, it’s encouraged to keep the majority of your bitcoin in your vault. You can then withdraw small amounts you intend to use to your phone, which is also known as a ‘hot wallet’, without exposing your entire fortune.

A hardware wallet like the Ledger Nano S or Trezor can essentially function as your own personal bank. This gives you peace of mind in knowing that no matter what, no one can access the funds in your vault but you.

In today’s robust Bitcoin eco-sphere, potential holders have many options available for hardware wallet storage. We’ll include the top two wallets we recommend for your consideration below, weighing the pros and cons of each one.

Ledger

Newcomers to the wallet scene, Ledger has already built an excellent reputation for itself. Based out of France, they offer an array of quality products ranging from the budget-friendly HW.1 to the tablet-like hardware wallet called the Ledger Blue that can run entire enterprises. To interact with their wallet, Ledger has developed a feature-rich application that is easy to use and looks outstanding. Their latest in design, the Ledger Nano S, can even accept payments in alt-coins such as Ether. The company has put a lot of effort in creating a positive customer experience, paying attention to every detail. Even the packaging looks suave and modern.

Trezor

An old faithful of the Bitcoin community, Trezor has been a pillar of security, setting the standard for new up and comers. The format hasn’t changed very much over the years because it works well. While less visually appealing than the Ledger offerings, the Trezor wallet has some interesting features, such as Hidden Wallets, and can even tie into Trezor’s password management site. Recognized as the most secure hardware wallet on the market today, Trezor continues to dominate the wallet scene, despite its higher price point.

Tips and tricks for keeping your Bitcoin safe

Check out our useful tips and tricks below to make Bitcoin all the more easy to use:

Remember the old saying, don’t keep all your eggs in one basket? Well, that applies to Bitcoin as well. Make sure that your Bitcoin isn’t all kept in the same wallet. It’s always advisable to use multiple wallets to ensure your anonymity.

You should also consider using different kinds of wallet options such as desktop, mobile, web and hardware.

If you’re using an exchange like Coinbase or Circle, avoid storing your Bitcoin in an exchange wallet. Simply move your funds to a personal wallet.

Keep your private information, such as your private key and mnemonic key, in a safe place.

Use two way or two factor authentication when accessing your wallet. This verifies your identity and enhances your wallet’s security.

Don’t forget to continuously generate new wallet addresses and use them only once.

How do I exchange Bitcoin into cash?

There’s plenty of different ways you can exchange Bitcoin to cash. Have a look at the information below for the option that’s right for you and your needs:

Debit Cards

Bitcoin makes life that much easier by letting you transfer money from your Bitcoin wallet directly to your debit card. Have a look at the following four recommended transfer options—they’re fast, reliable and 100% secure—and pick the option that works best for you.